Don’t Just Do It…
December 15th, 2006
If we look at the history of the last couple of centuries, we can see that great themes dominated economies for years at a time; the industrial revolution, global wars, oil crises, recessions, depressions, property booms, and the growth of personal wealth – I’m sure you can think of more. I believe that the next great theme to emerge will be that of global warming. As temperatures and seas rise, populations will migrate or be relocated (with huge implications for the construction of coastal defences and new infrastructures on higher grounds and in cooler climates).
The implications for energy are even more obvious, as we will simply have to consume less of our dwindling resources (e.g. oil, coal and gas) and convert to other means of powering our world such as wind and solar power. After a game of golf last weekend, the conversation at the nineteenth hole centred on global warming and when I went to our local B&Q store the next day I was struck by the fact that pride of place had been given to a range of solar panels and domestic wind turbines, overshadowing the Christmas display. This issue is, very slowly, becoming mainstream.
So does all this spell doom and gloom for us as investors? Perhaps not – investing in companies which will be at the forefront of the growth in new energies may not only be ‘ethically sound’ but may also be very profitable in the long term – and I mean long term. We clearly all take on the risk of investing our money with the aim of making a significant profit over time and, as I have warned over the years, too many of us take heed only of past performance and not future potential when choosing where to invest. The dot com investment bubble of the late nineties is testament to this.
I now believe that the economic arguments for investing in greener, more sustainable ways of achieving global growth have been crystallised. If you need to be convinced, you need only read a summary of The Stern Review, issued last month, which spells out not only the catastrophic environmental impact but also the economic consequences of not taking this threat seriously here and now. Alternatively, watch Al Gore’s film, An Inconvenient Truth, available soon on DVD.
This is an issue that I strongly believe can’t be ignored. More than that, I believe it’s an issue that we shouldn’t be afraid of as investors, and we should be aware that the conditions may well start to favour companies that will innovate to benefit from the changing world. It will also be interesting to see how environmental tax penalties and incentives shape the future of consumer habits, and how this in turn will affect corporate performance.
And what about doing our own bit? Well, we can all do more. I’ve started by buying a hybrid car (part electric, part petrol), which isn’t as good as having ‘no car’, I know. As an old mate of mine used to say – “What do you want, a paper hat?” Well yes, please. As long as it’s a recycled one.
Finally, moving on from green issues to gold ones, I am extremely proud of the team I have working with me, who for the third year running have contributed to our gaining the prestigious Gold Standard Award. This is quite an achievement in its own right, but it is even more impressive as it now applies to all of the companies in the Torquil Clark group.
Author: Don Clark
December 15th, 2006
Category: Investments.
